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U.S. FCC Issues Notice of Violation to Nike for Corporate Wireless System

In the latest example of increased U.S. Federal Communications Commission ("FCC") enforcement activity, the agency’s Enforcement Bureau has issued a Notice of Violation to Nike Inc., for interference caused by a defective UHF amplifier card in Nike’s corporate Distributed Antenna System (“DAS”) network. The Notice is an important reminder for all companies that operate wireless equipment to keep a close watch on FCC compliance and enforcement developments.

The underlying incident occurred on November 18, 2014, when an Enforcement Bureau agent traced interfering signals to Nike’s corporate DAS network in Hillsboro, Oregon. A DAS is a network of smaller antennas and is frequently used to provide better broadband and Wi-Fi coverage in large buildings and across corporate campuses. The FCC found that Nike’s DAS network was causing interference to an unidentified private business radio or public safety licensee in the band. Nike quickly remedied the issue by replacing the faulty card. The Notice requires Nike to submit information regarding the violation and the remedial actions taken, without proposing any penalties at this time.

The Nike Notice is the latest indication that the FCC Enforcement Bureau is taking a more aggressive approach towards FCC rule violations under new acting Bureau Chief Travis LeBlanc. Mr. LeBlanc, who was appointed to his position by FCC Chairman Tom Wheeler in March, has made changes to the Bureau’s approach to bring it closer to that of some other federal law enforcement and consumer protection agencies, including by requiring admission of guilt in consent decrees.

Of note, penalty amounts have been larger under Mr. LeBlanc’s direction, and stricter enforcement may be catching some companies off-guard. Earlier this year, the FCC proposed the largest fine in its history, $34.9 million, against a Chinese electronics manufacturer for marketing signal jamming devices. The Commission also penalized wireless carriers this year with hefty fines for FCC rule violations – Verizon recently agreed to pay $7.4 million and Sprint agreed to pay $7.5 million. In November, the FCC proposed a $10 million forfeiture against two companies for allegedly violating data security protection laws, notwithstanding dissents from Republican Commissioners Pai and O’Rielly expressing concerns that fair notice was not given to the companies involved.

The issuance of the Notice to Nike is a reminder that all companies with FCC licenses, even those not typically involved with FCC compliance, must remain vigilant in conforming to FCC rules.